US election campaign: Biden against and Trump for Bitcoin?

The Biden administration announced yesterday that it will stand in the way of the planned change in the law that would make it easier for US banks to store Bitcoin and cryptocurrencies for their customers. At the same time, presidential candidate Trump is campaigning to be more open to cryptocurrencies.

According to a recent statement, US President Joe Biden will veto H.J. Res. 109 when it reaches his desk. Part of this resolution, which was voted for by the majority of the House of Representatives, is to relax the regulations for the custody of Bitcoin and other cryptocurrencies by financial institutions. Specifically, this involves the repeal of Staff Accounting Bulletin (SAB) No. 121, which requires banks to carry digital assets as a liability on their balance sheets. This is a problem insofar as financial institutions must hold liquid assets equal to the value of their customers' crypto assets.

Interest groups from the banking sector were already campaigning in February to overturn SAB 121 so that they can also act as custodians for Bitcoin ETFs - Blocktrainer.de reported. The rationale for the Biden administration's announced veto is that the bill would interfere with the U.S. Securities and Exchange Commission's (SEC) efforts to protect investors in the crypto market as well as the broader financial system.

The Administration strongly opposes passage of H.J. Res. 109, which it argues would disrupt the Securities and Exchange Commission's (SEC) work to protect investors in the crypto-asset markets and protect the broader financial system. H.J. Res. 109 would invalidate SEC Staff Accounting Bulletin 121 (SAB 121), which reflects the SEC staff's views on the accounting obligations of certain companies that custody cryptoassets.
_{From the actual statement}

The announced veto was met with outrage not only in the Bitcoin community, but also in politics. Republican Congressman French Hill, for example, commented on the issue. Hill emphasized that it is not standard practice to hold equity for assets in custody and that it makes no sense to treat crypto-assets differently in this respect. The Republican also criticizes the fact that SAB 121 did not go through the necessary administrative procedure at the time.

Bitcoin-friendly Senator Cynthia Lummis is also campaigning for the abolition of SAB 121. The Republican collected 30 signatures from party colleagues in the Senate to push the resolution forward by means of a petition, despite the headwinds of the Biden administration.

At the same time, presidential candidate Donald Trump is speaking positively about Bitcoin and cryptocurrencies and advocating a more open approach to politics. A few years ago, Trump was much more critical in this regard. Speaking to Fox Business in the summer of 2021, the ex-president emphasized that Bitcoin appears to be a scam.

Bitcoin, I think it just looks like a scam. [...] I don't like it because it's another currency that competes with the US dollar. [...] I want the US dollar to be the currency of the world - that's what I've always said.
_{Donald Trump}

Yesterday, Trump met with buyers of his NFT collection on his court-free day at Mar-a-Lago. Trump is currently on trial for allegedly falsifying business records related to hush-money payments to porn actress Stormy Daniels before the 2016 election, likely to prevent her from going public with allegations of an affair in 2006. The presidential candidate denies the affair and the allegations against him.

In videos circulating on 𝕏 of the meeting with his supporters, it seems as if Trump has now realized that the issue can be used to win votes - especially because his rival is more anti-Bitcoin.

Elsewhere, Trump was asked by an audience member about the fact that some crypto companies are leaving the US due to problematic regulation. Trump replied that it was due to the current hostility towards the asset class and that he wanted to keep the companies in the country.

Trump also announced that he would ensure that campaign donations could also be made to him via cryptocurrencies.

A few days ago, the British bank Standard Chartered predicted that Trump as president could be a catalyst that could catapult Bitcoin to a price of over 200,000 by the end of 2025. Standard Chartered has attracted attention in the past with polarizing predictions that have not come true.

Although the current leading presidential candidate in the polls is now showing a liberal attitude towards Bitcoin and the like, he is still far from being a supporter. In an interview with CNBC in March of this year, Trump first declared that he would prohibit countries from turning their backs on the US dollar. Nevertheless, he acknowledged the growing interest in cryptocurrencies and admitted that he himself also trades in digital assets - but not in Bitcoin.

If Trump becomes president, it will be interesting to see whether strengthening the US dollar or a liberal approach to Bitcoin and cryptocurrencies is more important to him. However, the 77-year-old may also realize that the US dollar could also benefit from Bitcoin.

In addition to Trump and Biden, there is another candidate, Robert F. Kennedy Jr., who is currently polling at around 10 percent. Kennedy caused a stir when he presented his plan to hedge part of the US dollar with Bitcoin. However, as the nephew of former President John F. Kennedy also showed sympathy towards alternative cryptocurrencies, he quickly lost his initial support from the large Bitcoin community.

It remains to be seen whether Bitcoin will become a major issue in the US presidential election. In any case, it would be positive for the adoption of Bitcoin if Trump were to reverse SAB 121 as president, allowing more and more banks to offer Bitcoin-related services. Traditional financial institutions could then also accept Bitcoin as collateral for loans. Alongside ETF approval and decent accounting guidelines for companies, this would be another positive factor in terms of institutional adoption.

As more and more people around the world are interested in Bitcoin and other cryptocurrencies and have a positive attitude towards the asset class, it is only logical that politicians will use the topic for their election campaigns. In the meantime, it seems to be a greater risk for politicians to position themselves against cryptocurrencies than in favor of them, as too many voters are simply interested in a liberal approach to the asset class.

In Korea, the approval of Bitcoin spot ETFs on the local stock exchange was a relevant issue in the parliamentary election. The Democratic Party, which promised to support trading in exchange-traded Bitcoin funds in the Republic, was able to win a majority. And in Germany, too, the opposition party AfD seems to be slowly taking an interest in Satoshi Nakamoto's creation.